Fed eliminates transfer limit on monthly withdrawals from savings accounts

The Federal Reserve building is seen on April 2, 2020 in Washington, DC. (Photo by OLIVIER DOULIERY/AFP via Getty Images)

The Federal Reserve announced Friday that banks can allow consumers to make an unlimited number of withdrawals from their savings accounts without paying an additional fee.

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The U.S. central bank said it was eliminating the rule that typically limited account holders from making more than six withdrawals from such accounts each month because "financial events associated with the coronavirus pandemic have made such access more urgent."

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Still, lenders are not required to offer unlimited transfers each month, the Fed said in a statement, and can retain existing fees on transactions of more than six a month.

The U.S. central bank, facing an economic threat that Chair Jerome Powell said is like no other, has unleashed its full firepower to support the economy, including slashing interest rates to near-zero, purchasing an unlimited amount of Treasurys (a practice known as quantitative easing) and launching crisis-era lending facilities to ensure that credit flows to households and businesses.

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“When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen,” Powell said at the end of March. “We still have policy room in other dimensions to support the economy.”